Euro Sentiment at Extremes - Further Rallies Remain Likely
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EURUSD: Retail trader data shows 28.4% of traders are net-long with the ratio of traders short to long at 2.52 to 1. In fact, traders have remained net-short since Mar 15 when EURUSD traded near 1.07374; price has moved 0.8% higher since then. The number of traders net-long is 4.8% lower than yesterday and 37.9% lower from last week, while the number of traders net-short is 4.6% lower than yesterday and 34.9% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURUSD-bullish contrarian trading bias.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.